WHAT ARE IMPACT FEES
Impact Fees are a funding mechanism that allows entities to recover the costs associated with new facilities or facility expansions to serve future development. These fees are utilized to assist in reducing the cost of needed infrastructure paid by existing customers through water rates.
For example, if Developer A is developing a new subdivision or Company B is building new commercial space in town, existing water lines may need to be upsized to meet the needs of existing and new connections. Developer A and Company B pay a one-time Impact Fee per connection that covers their fair share of maintaining services and facilities for all BPSUD customers. These funds are used to upgrade and construct the infrastructure to provide that service.
This procedure is established by the Texas Local Government Code Chapter 395 and sets forth the mandated requirements that the Impact Fees be based on a specific list of improvements and that they are re-evaluated every 5 years. These fees are based upon the value of the improvements divided by the growth attributed to new development.
WHY DO WE COLLECT THEM
Previously, the costs associated with expanding BPSUD water facilities were borne by all of the District’s customers. Now, through the use of Impact Fees, the developers who create the additional demand are paying a portion of the cost of meeting that demand. This helps reduce rate increases that all customers must pay and ensures that those who place additional demand on the water system help pay the costs required.
WHO IS REQUIRED TO PAY THEM
Impact Fees will be required by any person requesting new water service or having to follow the non- standard process after June 23, 2023. This could be an individual or a development company. In a development, developers and home builders will have their own agreement in place on which party pays the Impact Fees to cover their impact on the system.
HOW MUCH ARE THEY
State law requires that a public meeting be held before the Board adopts the Impact Fees. The Board has the authority to adopt any fee rate that does not exceed the maximum allowable rate determined by the Impact Fee Study. Following a Public Hearing in January 2023, the Board adopted the following Impact Fees for a standard 5/8″ x 3/4″ meter: $2750.00
For any meter larger than 5/8″ x 3/4″, please coordinate with the District.
HOW ARE THEY DETERMINED
The development of water Impact Fees is conducted as required by Chapter 395 of the Texas Local Government Code. This includes analyzing forecasts of how population and land use throughout the water service area is expected to change. The Land Use Assumptions take into account historical growth trends within the District, growth potential for undeveloped areas within the service area, and ten-year growth projections by pressure plane. Next, a Capital Improvements Plan (CIP) for ten years was drafted that identifies the improvements that will be needed to meet projected demand. Finally, the maximum Impact Fees are calculated by dividing the cost of capital improvements that will be required for future growth by the number of service units, or meters, projected in the Land Use Assumptions and that number is divided in half.
CAPITAL IMPROVEMENTS ADVISORY COMMITTEE (CIAC)
The Impact Fee process is overseen by the Capital Improvements Advisory Committee (CIAC). The committees’ involvement is intended to ensure that the Impact Fees are conducted legally and reflect existing and projected conditions. The CIAC is made up of three BPSUD Board Members and two developer representatives. The CIAC’s role is to:
Advise and assist BPSUD in adopting Land Use Assumptions.
Review the Water CIP and file written comments with the Board.
Monitor and evaluate the implementation of the District’s CIP.
Advise the Board of the need to update or revise the Land Use Assumptions, CIP, and Impact Fees.
WHAT PROJECTS ARE FUNDED
The Impact Fee CIP list provides the District with a logical strategy for upgrading and expanding its water distribution system to accommodate future growth and for addressing improvements. These projects are also necessary to continue providing affordable, reliable, and safe water to BPSUD customers.
Major Projects Include:
Pump Upgrades at the Port Bolivar Plant
$20 million in waterline upgrades
WHAT’S THE PROCESS
The process for assessing and collecting Impact Fees begins when the non-standard application is received and a first hydraulic analysis is completed. After the developer submits plans to BPSUD, an engineering plan review is performed. The assessment, or final calculation, of Impact Fees will be dependent on Plan Approval from BPSUD. At that time, the development is held in the hydraulic model.
The Impact Fees will be collected from the developer at the time A “Will Serve” letter is provided. After the acceptance of final construction completion, the meter application, as well as a deposit and required Connection Fees, will be submitted to BPSUD by the developer to have the meter installed.
For more information and resources about Impact Fees, please contact:
Bolivar Peninsula Special Utility District
Office & After Hours: 409.684.3515
Mailing Address: P.O. Box 1398, Crystal Beach, Texas 77650
Physical Address: 1840 Hwy 87, Crystal Beach, TX 77650
Email: comments@bpsud.com
Office Hours: Monday – Friday 7:30 a.m. to 4:00 p.m.